Foreign buyers are capitalizing on the slump in the U.S. housing market by purchasing homes here in large numbers. The U.S. has been the top destination for foreign buyers for a long time. The increase in foreign real estate investment by $16 billion indicates that the U.S. still continues to be the most attractive destination for foreign buyers.
Here are some hard facts to validate this. According to the National Association of Realtors’ (NAR) 2011 Profile of International Home Buying Activity, the total residential international sales in the U.S. for the past year ending March 2011 equaled $82 billion, up from $66 billion in 2010. But more importantly, the average amount paid by foreign buyers was $315,000, whereas the domestic average was $218,000. However, 45 percent of international purchases were under $200,000.
Here are some reasons why international buyers prefer to purchase homes in the U.S. The U.S. is generally considered a safe and stable environment for investments. Properties here are a lot cheaper than most markets in Europe. Unlike many other countries, real estate investments in the U.S. have historically achieved a higher long-term appreciation. Since many international students come to U.S. universities for undergraduate and higher education, many parents believe it makes practical sense to buy rather than rent homes for their kids. Many temporary foreign workers in the high-tech field also find it more economical to buy a home rather than leasing apartments.
International buyers are very picky when it comes to their buying preferences. The buying decisions were primarily influenced by four factors: proximity to their home country; convenience of air transportation; climate and location. Florida, California, Texas and Arizona have been the darlings of international buyers for the past five years, mostly because of their balmy winters. 31 percent of foreigners prefer to by homes in Florida, which is the top destination. California comes in second with 12 percent, followed by Texas with 9 percent, and Arizona with 6 percent. There is a distinct pattern of buying preference among various ethnic groups. Florida is preferred by Canadians, Europeans and South Americans. Asians have historically chosen the West Coast and most Europeans prefer the East Coast. Mexican buyers seem to prefer the Southwestern region.
People from 70 countries purchased homes in the U.S. this year, which are 17 more than the year before. Canadians dominated the foreign buyers with 23 percent. China came in second with 9 percent. India, the U.K. and Mexico were tied for the third place. These five countries accounted for 53 percent of foreign transaction in 2011.
As far as statistics are concerned, 28 percent of Realtors reported working with a foreign buyer in 2011. 55 percent served at least one international client. Eight percent of Realtors obtained 50 percent or more of their transactions from foreign buyers. 61 percent of foreign buyers bought a single-family home while 36 percent purchased a condo, apartment or townhouse. 62 percent of international transactions were made by paying cash. The biggest hurdle for foreign buyers continues to be the availability of financing, with 32 percent reporting this as their primary reason for not buying a home. In addition to financing, foreign buyers cited legal, tax and immigration as other factors that prevented their real estate purchase.
Here are some hard facts to validate this. According to the National Association of Realtors’ (NAR) 2011 Profile of International Home Buying Activity, the total residential international sales in the U.S. for the past year ending March 2011 equaled $82 billion, up from $66 billion in 2010. But more importantly, the average amount paid by foreign buyers was $315,000, whereas the domestic average was $218,000. However, 45 percent of international purchases were under $200,000.
Here are some reasons why international buyers prefer to purchase homes in the U.S. The U.S. is generally considered a safe and stable environment for investments. Properties here are a lot cheaper than most markets in Europe. Unlike many other countries, real estate investments in the U.S. have historically achieved a higher long-term appreciation. Since many international students come to U.S. universities for undergraduate and higher education, many parents believe it makes practical sense to buy rather than rent homes for their kids. Many temporary foreign workers in the high-tech field also find it more economical to buy a home rather than leasing apartments.
International buyers are very picky when it comes to their buying preferences. The buying decisions were primarily influenced by four factors: proximity to their home country; convenience of air transportation; climate and location. Florida, California, Texas and Arizona have been the darlings of international buyers for the past five years, mostly because of their balmy winters. 31 percent of foreigners prefer to by homes in Florida, which is the top destination. California comes in second with 12 percent, followed by Texas with 9 percent, and Arizona with 6 percent. There is a distinct pattern of buying preference among various ethnic groups. Florida is preferred by Canadians, Europeans and South Americans. Asians have historically chosen the West Coast and most Europeans prefer the East Coast. Mexican buyers seem to prefer the Southwestern region.
People from 70 countries purchased homes in the U.S. this year, which are 17 more than the year before. Canadians dominated the foreign buyers with 23 percent. China came in second with 9 percent. India, the U.K. and Mexico were tied for the third place. These five countries accounted for 53 percent of foreign transaction in 2011.
As far as statistics are concerned, 28 percent of Realtors reported working with a foreign buyer in 2011. 55 percent served at least one international client. Eight percent of Realtors obtained 50 percent or more of their transactions from foreign buyers. 61 percent of foreign buyers bought a single-family home while 36 percent purchased a condo, apartment or townhouse. 62 percent of international transactions were made by paying cash. The biggest hurdle for foreign buyers continues to be the availability of financing, with 32 percent reporting this as their primary reason for not buying a home. In addition to financing, foreign buyers cited legal, tax and immigration as other factors that prevented their real estate purchase.
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